UK postpones auctions of EU aviation CO2 permits

LONDON

LONDON (Reuters) - The British government said on Monday it will postpone two auctions of European Union emissions permits for the aviation sector, after the European Commission proposed freezing its airline emissions law for non-EU flights last week.

"If agreed, this announcement could impact on the volume of aviation allowances to be auctioned during 2012," a Department of Energy and Climate Change spokeswoman said.

"As the Commission is unable to determine the precise number of allowances to be auctioned in 2012, we consider that it is sensible to postpone the remaining aviation allowance auctions scheduled for 2012."

No new dates were set for two auctions of a total of 7 million EU aviation allowances (EUAAs), which were scheduled to take place on November 26 and December 10 on the exchange ICE Futures Europe.

Last week, the European Commission froze for a year its law that all airlines must pay for carbon emissions for flights into and out of EU airports after opposition from China, India, the United States and other countries.

Airlines that operate flights within Europe still have to pay for their carbon emissions and must still surrender carbon permits to cover their 2012 emissions by April 30, 2013.

The European Commission has agreed to provide details on the volume and timing of aviation allowances in due course to allow auctions to be held by April.

"The UK will press for this to be made as soon as practicable to give certainty to the market," the spokeswoman said.

The European Commission said on Friday it would postpone the sale of aviation carbon permits, which affects eight scheduled auctions for a total of 24.4 million EUAAs.

Germany was also scheduled to sell around 2.5 million EUAAs, while the EU was due to auction 14.9 million EUAAs in five auctions on EEX before the end of the year.